How do you start budgeting? If I make $5k a month, do I start with that amount and subtract expenses, or should I include any leftover money from the previous month? Also, how do you handle unexpected big purchases—do you pull from savings and adjust the budget, or just spend less on other items to save for it?
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Last year, I made an average of 8.3k per month. I am married and have one child. It’s absolutely ridiculous how high it is, especially when I don’t do anything enjoyable other than purchasing a $60 game every 2-3 months.
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Hey Maxwell, I probably make $8500 per year, pay about $5500 on fixed costs have paid off all consumer loans saved one automobile in the last year. Saving aggressively for retirement and maxing out FSA/has.
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A straightforward budgeting technique that will assist you in efficiently, easily, and sustainably managing your finances is the 50/30/20 rule. Generally speaking, you should allocate your monthly after tax income into three categories for spending 20% for debt repayment or savings, 30% for wants, and 50% for needs
Absolutely! Budgeting can feel overwhelming, but it’s like a financial roadmap to your goals. Here’s how I approach it:
- Your Budget Starting Point: There’s no one-size-fits-all answer, but a good rule of thumb is the 50/30/20 rule. This means allocating roughly:
- 50% of your income goes to needs like rent, groceries, and utilities.
- 30% for wants like entertainment, dining out, and hobbies.
- 20% to savings and debt repayment.
- Starting Your Budget: Here’s where your $5,000 monthly income comes in! List all your monthly expenses. Then, see how it fits into the 50/30/20 framework.